Today, U.S. Representative Ed Royce (R-CA) and U.S. Representative Terri Sewell (D-AL) introduced H.R. 4211, the Credit Score Competition Act of 2015. The bill enables Fannie Mae and Freddie Mac to consider credit scoring models they currently don’t evaluate when making mortgage purchasing decisions:
“The GSEs’ use of a single credit score is an unfair practice that stifles competition and innovation in credit scoring. Breaking up the credit score monopoly at Fannie and Freddie will also assist them in managing their credit risk and decreases the potential for another taxpayer bailout,” said Rep. Royce.
“Fannie Mae and Freddie Mac are the largest mortgage purchasers in the nation, but they rely on credit score models that don’t necessarily take into account something as simple as whether borrowers have paid their rent on time. Home ownership is an integral part of the American Dream that shouldn’t be out of the reach for low-income, rural, and minority borrowers who lack access to traditional forms of credit. This legislation takes an important step towards addressing this issue and helps make homeownership a reality for more Americans across the country,” said Rep. Sewell.
Allowing Fannie and Freddie to make mortgage purchasing decisions with access to multiple empirically …read more
Source:: U.S. Rep. Ed Royce